World Bank Approves $370m to Tackle Dhaka Water Pollution Crisis

The World Bank has approved $370 million in financing to overhaul sanitation and solid waste management services in Dhaka and surrounding areas, in a major push to curb water pollution and restore the capital's collapsing river and canal systems.

The Metro Dhaka Water Security and Resilience Program will introduce results-based funding mechanisms aimed at strengthening the capacity of city corporations and the Water Supply and Sewerage Authority (WASA) to deliver measurable environmental improvements.

The initiative will provide safely managed sanitation services to 550,000 people and improved solid waste management to 500,000 residents, prioritizing communities most affected by pollution and service shortfalls.

A Growing Environmental and Public Health Emergency

Greater Dhaka generates roughly half of Bangladesh's formal employment and contributes one-third of national GDP. Yet rapid urbanization and industrial expansion have severely strained its water infrastructure.

Only about 20 percent of residents are connected to a piped sewer system, while just 2 percent have access to functional fecal sludge management. As a result, more than 80 percent of untreated wastewater and sewage flows directly into the capital's interconnected rivers and canals.

More than half of Dhaka's canals have disappeared or become clogged, worsening flooding and pollution.

"Waterbodies are the lifeline for millions of people in greater Dhaka," said Jean Pesme, World Bank Division Director for Bangladesh and Bhutan.

"But rapid, unplanned urbanization and industrial growth have outpaced the city's capacity to manage wastewater and pollution, impacting public health, environment, and the economy."

Industrial Waste a Major Contributor

Industrial pollution compounds the crisis. Approximately 80 percent of Bangladesh's export-oriented garment factories are located in Dhaka. More than 7,000 factories collectively discharge an estimated 2.4 billion litres of untreated wastewater into waterways each day.

The contamination has been linked to skin conditions, diarrheal diseases, and neurological disorders among surrounding communities.

The new program seeks to mobilize private sector participation, encouraging industries to invest in effluent treatment systems and water reuse technologies to reduce discharge and improve water efficiency.

Results-Based System and Digital Monitoring

The first phase of the multi-year program will focus on selected areas in Dhaka and Narayanganj. It aims to:

• Reduce pollution discharge into rivers and canals

• Strengthen regulatory and institutional monitoring systems

• Establish a comprehensive water quality index for Dhaka's rivers

• Deploy digital real-time pollution monitoring

• Develop integrated river restoration plans for four major rivers

"The program is part of a multi-phase, long-term engagement supporting Bangladesh's broader water security and resilience agenda," said Harsh Goyal, World Bank Senior Water Supply and Sanitation Specialist and Task Team Leader.

Improving Waste Collection and Enforcement

The project will expand primary waste collection services, particularly in underserved neighbourhoods near major waterways. Recycling systems will be upgraded, and community awareness campaigns will aim to curb direct sewage discharge and illegal solid waste dumping.

Enforcement mechanisms will also target industrial effluent discharge into rivers and canals.

Long-Term Engagement in Bangladesh

The Metro Dhaka program builds on the World Bank's longstanding partnership with Bangladesh. Since the country's independence, the Bank has committed over $46 billion in grants and concessional financing. It currently maintains an active portfolio exceeding $12 billion across 43 projects.

Officials say the latest investment marks a significant step toward reversing environmental degradation in one of South Asia's fastest-growing megacities while laying the institutional foundations for sustainable urban water management.